Pavel Zavalny, the head of Russia’s energy commission, said earlier today that the country would allow friendly countries to pay for oil, gas and other exports in Bitcoin.
The statement comes as Russian lawmakers seek to offset economic damage caused by US and EU sanctions and boost trade with “friendly” countries.
And while it might look like Russia might actually be using Bitcoin to evade sanctions, chances are it’s nothing more than a government ploy to distract prying eyes from the rapid de-dollarization of its exports.
Bitcoin is a scapegoat in Russia’s dedollarization
As Russia struggles to maintain its trade amid devastating economic sanctions, its lawmakers are proposing various methods to accelerate the de-dollarization of its exports.
Pavel Zavalny, a deputy from the United Russia party in the State Duma, believes that the only way to achieve this is to strictly separate the sale of Russia’s energy resources between friendly and hostile countries.
According to a report by Economics Today, a Russian financial outlet, Zavalny said Moscow would sell commodities to ‘hostile states’ for rubles and gold, forcing them to either buy Russia’s national currency or share their gold reserves with the country.
Friendly states, however, will be able to purchase all of Russia’s exports with Chinese yuan, Turkish lira, Serbian dinar and bitcoin.
It makes no sense for Moscow to keep trading in euros and dollars at a time when the West has blocked all Russian settlements in those currencies, Zavalny said today at a press conference on Russia Today . He compared dollars to “candy wrappers”, saying they had become useless in the Russian economy.
“We have been suggesting for a long time that China should move to settlements in national currencies, both rubles and yuan. With Turkey, it will be liras and rubles. The set of currencies used may be different [for each country] but it is common practice. If we have bitcoins, we will trade bitcoins,” he explained.
The statement spread like wildfire, making headlines in both mainstream and crypto media. With Russia’s potential use of Bitcoin being one of the hottest topics of the past month, any mention of cryptocurrencies has the potential to rock the market.
However, Zavalny’s take on bitcoins looks more like a smart way to lend more weight to Russia’s efforts to ditch the dollar. In the country’s quest to keep its economy afloat and its exports going, anything goes, even a fully transparent digital asset that’s extremely sensitive to major market movements.
This is the message Russia is trying to convey to both the US and the EU, both of which have stepped up efforts to introduce tough regulations on the crypto industry.
The Biden administration has signed the new Cryptocurrency Executive Order, while the EU is waging its own war against Bitcoin and other PoW cryptocurrencies with the MiCA bill.
In this case, Bitcoin presents itself as an easy target. With no central government to control it and no costly trade deals tied to it, it’s an easy way out for the West in its attempt to cripple the Russian economy. Sanctioning economies as large as China and Russia for stifling Russian exports is not only highly unlikely but almost utterly impossible without causing fatal injury to the West.
Bitcoin trading will also drastically reduce the number of “friendly” countries on Russia’s list, as there is no evidence that any of its allies hold Bitcoin in their reserves.
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